Diversity Requirements For California’s $330M Annual Film & TV Tax Credits Poised To Become Law

Diversity Requirements For California’s $330M Annual Film & TV Tax Credits Poised To Become Law

Hollywood soon might be required to do more than just talk about the importance of diversity in the industry, if a new addition to an extension of California’s lucrative film and television tax credits becomes law.

With new provisions added Wednesday, the latest version of Senate Bill 485 (read it here) wending its way through the state Assembly in Sacramento and toward a second reading makes it very clear that productions need to widen their demographic aperture if they want to be eligible for big-bucks incentives from the Golden State. Almost certain to be signed by re-election seeking Gov. Gavin Newsom as a part of the overall legislation extending the $330 million annual tax credits until 2030, the addition that passed a vital vote on reads:

This bill, for credit allocations made on or after July 1, 2023, would revise the definition of qualified motion picture for purposes of the credit to require an applicant to provide a diversity workplan that includes goals that are broadly reflective of California’s population, as specified, and would require the commission to approve or reject each diversity workplan, to the extent allowed by federal and state law. The bill would prohibit the commission from certifying the tax credit for an applicant required to provide a diversity workplan until the commission receives the applicant’s final diversity report, and would authorize the commission to increase the applicant’s credit percentage if the commission determines that the applicant has met or made a good faith effort to meet the diversity goals in its diversity workplan (read the whole bill here).

One of the bipartisan bill’s primary sponsors told Deadline today that it was time for Tinseltown to if they wanted taxpayers’ money out of the California Film Commission administered program.

California’s Film & TV Incentives Program Generated $21.9B in Economic Output, Report Says; 110,000 Jobs & $7.7B In Wages Over 5 Years

“The California Film Tax Credit has been incredibly successful as an economic driver for the state, however, there is a lot more to be done and it is long overdue in the investment of public dollars to create diversity and equity opportunities for both below and above the line workforce,” said Assemblywoman Wendy Carrillo (D-Los Angeles). “As we move forward, with support from Governor Gavin Newsom and the legislature, we expect the motion picture, television and streaming industry to embrace California’s broad and diverse population, in the stories they tell and in the people who work – in front and behind the camera – to bring those stories to audiences across the globe,” added the former journalist who now represents almost 500,000 Angelenos and covers many a Hollywood studio in State Assembly District 51.

“Most importantly, it is critical that through tax credits, people of color, and Latinos specifically, who are the largest population in the state, are not financing their own erasure from the entertainment industry,” Carrillo, who was first elected in 2017 stated.

For a state that is roughly 40% Latino, according to the latest census data, and an industry that does not represent that reality, the Assemblywoman’s words are as much of a wake-up call as they are an expression of political clout. Since the revitalized California tax incentives were signed into law by then-Gov. Jerry Brown nearly a decade ago, the focus of the multi-million annual program has been job creation and servicing local economies.

The extension bill — authored by Sen. Anthony Portantino, whose district includes Burbank, Glendale, Pasadena and environs — has passed the state Senate. As this week demonstrates, it is moving through the appropriations process and next will go to the full Assembly. If approved, as is well expected, the legislation could be signed by Newsom before the end of this month.